Oil prices rise again on further Libyan fighting
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Pastor Dale Morgan
Mar 4, 2011, 6:11:45 AM3/4/11
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Oil prices rise again on further Libyan fighting
The latest rise in oil prices comes as Chris Huhne, the UK's climate and energy secretary, warned of a 1970s-style oil shock
* Julia Kollewe
* guardian.co.uk, Friday 4 March 2011 09.30 GMT
A Libyan rebel at a military taken over in Ajdabiyah A Libyan rebel at a military base taken over in Ajdabiyah. Further fighting has pushed up the price of oil again.
Oil prices rose more than a dollar this morning as fighting in Libya intensified.
Brent crude climbed as high as $116.20 a barrel, up over 1%, amid fears that the crisis could spread from North Africa to oil-rich countries in the Gulf. A Libyan warplane dropped bombs just beyond the walls of a military base held by rebels in the eastern town of Ajdabiyah but did not hit it, Reuters reported.
The latest rise in oil prices comes as Chris Huhne, the UK's climate and energy secretary, warned of a 1970s-style oil shock. He said if the oil price doubles from $80 a barrel last year to $160 a barrel this year, this could wipe £45bn off the value of the British economy in the next two years. "This is not just far-off speculation: it is a threat here and now," he said.
The crisis has disrupted oil production in Libya, which usually pumps 1.6m barrels of crude a day.
Fatih Birol, the International Energy Agency's chief economist, repeated his warning that the surge in oil prices could derail the global economic recovery. "The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case," he said at a conference in Berlin this week. If prices held at current levels, Europe's oil costs would be higher than in 2008, a record year for prices, he warned.
"Europe is the weakest link in the chain of economic recovery ... In Europe, 75% of the gas prices are linked to oil prices. In a few months gas prices are going to increase," said Birol.
The IEA is considering tapping its strategic oil reserves, he reiterated in an interview with the Financial Times Deutschland. "We are monitoring the situation from hour to hour very closely and are in close contact with governments," Birol said. "We can bring 2 million barrels onto the market every day and that for two years without a pause. At the moment, Saudi Arabia is making up for the shortfall caused by the Libyan crisis by stepping up its own production.
Oil prices rise again on further Libyan fighting
The latest rise in oil prices comes as Chris Huhne, the UK's climate and energy secretary, warned of a 1970s-style oil shock
* Julia Kollewe
* guardian.co.uk, Friday 4 March 2011 09.30 GMT
A Libyan rebel at a military taken over in Ajdabiyah A Libyan rebel at a military base taken over in Ajdabiyah. Further fighting has pushed up the price of oil again.
Oil prices rose more than a dollar this morning as fighting in Libya intensified.
Brent crude climbed as high as $116.20 a barrel, up over 1%, amid fears that the crisis could spread from North Africa to oil-rich countries in the Gulf. A Libyan warplane dropped bombs just beyond the walls of a military base held by rebels in the eastern town of Ajdabiyah but did not hit it, Reuters reported.
The latest rise in oil prices comes as Chris Huhne, the UK's climate and energy secretary, warned of a 1970s-style oil shock. He said if the oil price doubles from $80 a barrel last year to $160 a barrel this year, this could wipe £45bn off the value of the British economy in the next two years. "This is not just far-off speculation: it is a threat here and now," he said.
The crisis has disrupted oil production in Libya, which usually pumps 1.6m barrels of crude a day.
Fatih Birol, the International Energy Agency's chief economist, repeated his warning that the surge in oil prices could derail the global economic recovery. "The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case," he said at a conference in Berlin this week. If prices held at current levels, Europe's oil costs would be higher than in 2008, a record year for prices, he warned.
"Europe is the weakest link in the chain of economic recovery ... In Europe, 75% of the gas prices are linked to oil prices. In a few months gas prices are going to increase," said Birol.
The IEA is considering tapping its strategic oil reserves, he reiterated in an interview with the Financial Times Deutschland. "We are monitoring the situation from hour to hour very closely and are in close contact with governments," Birol said. "We can bring 2 million barrels onto the market every day and that for two years without a pause. At the moment, Saudi Arabia is making up for the shortfall caused by the Libyan crisis by stepping up its own production.
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